Consumer Confidence Grew in October as Concerns Over Delta Variant Eased
NEW YORK — Consumer confidence grew in October, reversing three month of declines due to concerns over the spread of the delta variant of the coronavirus, the Conference Board reported Tuesday.
The not-for-profit, non advocacy think tank said its proprietary Consumer Confidence Index currently stands at 113.8, up from a measurement of 109.8 in September.
Its separate Present Situation Index, which is based on consumers’ assessment of current business and labor market conditions, rose to 147.4 from 114.3 over the past month.
In addition, the Conference Board’s Expectation Index, which is based on consumers’ short-term outlook for income, business, and labor market conditions, jumped to 91.3 in October, up from 86.7 in September.
“While short-term inflation concerns rose to a 13-year high, the impact on confidence was muted,” said Lynn Franco, senior director of economic indicators at The Conference Board, in a written statement.
“The proportion of consumers planning to purchase homes, automobiles, and major appliances all increased in October—a sign that consumer spending will continue to support economic growth through the final months of 2021,” Franco said.
Significantly, nearly half of respondents to a Conference Board survey, 47.6%, said they intend to take a vacation within the next six months.
Franco said the percentage is the highest sentiment has reached about vacation since February 2020. She described it as “a reflection of the ongoing resurgence in consumers’ willingness to travel and spend on in-person services.”
The Present Situation
The Conference Board said consumers’ appraisal of current business conditions was mixed in October.
- 18.6% of consumers said business conditions are “good,” down from 19.1%.
- On the other hand, 24.9% of consumers said business conditions are “bad,” down from 25.3%.
At the same time, consumers’ assessment of the labor market was moderately more favorable.
- 55.6% of consumers said jobs are “plentiful,” down from 56.5%.
- Conversely, 10.6% of consumers said jobs are “hard to get,” down from 13.0%.
Expectations for the Next Six Months
Consumers’ optimism about the short-term business conditions outlook was also mixed in October.
- 24.3% of consumers expect business conditions will improve, up from 21.7%.
- On the other hand, 21.1% expect business conditions to worsen, up from 17.6%.
However, they were more optimistic about the short-term labor market outlook.
- 25.4% of consumers expect more jobs to be available in the months ahead, up from 21.3%.
- 18.3% anticipate fewer jobs, down from 19.9%.
Consumers also were decidedly more positive about their short-term financial prospects.
- 18.7% of consumers expect their incomes to increase, up from 16.9%.
- 11.3% expect their incomes will decrease, virtually unchanged from 11.4%.
The monthly Consumer Confidence Survey, based on an online sample, is conducted for The Conference Board by Toluna, a technology company that specializes in real-time consumer insights and market research.
The Conference Board publishes the Consumer Confidence Index at 10 a.m. eastern time on the last Tuesday of every month.
For those unfamiliar with how The Conference Board became the custodian for so many economic indicators, it all goes back to 1995, when the Bureau of Economic Analysis decided to seek a private organization to produce and disseminate its monthly cyclical indicators — including the leading economic indicators and the widely publicized composite leading index.
“Users of economic statistics agree that the foremost problems we face concern the way we measure output, prices, and the nation’s capital stock,” said Everett Ehrlich, the under secretary for economic affairs at the Commerce Department, when the change was announced.
“We need to redirect our resources away from statistical programs, such as the cyclical indicators, that no longer require a government role, and towards these most pressing statistical issues,” Ehrlich said.
After a bidding process, The Conference Board was selected to be the official reporter of the nation’s composite leading, coincident, and lagging economic indexes.
The Board also agreed to maintain the Business Cycle Indicators database, which has more than 250 economic series, and to start a related publication, also called Business Cycle Indicators.
Dan can be reached at [email protected] and at https://twitter.com/DanMcCue.
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